Credit Card Association of the Philippines has initiated a program that will allow restructuring existing debts. The Inter-Bank Debt Relief Program (IDRP) was precisely developed in order to help highly indebted and financially distressed (but well-meaning) customers get back on track towards responsible credit use.
Notwithstanding the best Intentions and careful money management, however, life sometimes presents unexpected twists and turns. While there are those who become saddled with credit card debt purely out of reckless use and impulse spending, some individuals find themselves in a credit dilemma due to circumstances beyond their control, such as sickness in the family, loss of a job, the death of the primary breadwinner, or even costs brought about by natural calamities.
Biboy Gomez of BPI
The Credit Card Association of the Philippines through Its member card companies partnership with the Bangko Sentral ng Pilipinas (BSP) and the participation of BDO Unrbank, Inc., has initiated a program that will allow restructure existing debts in order to help highly indebted and financially distressed (but well-meaning) customers get back on track towards responsible credit use.
- Asia United Bank
- Bank of Commerce
- Bank of the Philippine Islands
- China Banking Corporation
- Eastwest Banking Corporation
- Equicom Savings Bank
- Metrobank Card Corporation
- Philippine National Bank
- RCBC Bankard
- SB Cards Corporation
- Standard Chartered Bank
- Union Bank of the Philippines)
“With the help of the Bangko Sentral ng Pilipinas (BSP), CCAP, and BDO Unibank, Inc., the IDRP aims to offer more affordable terms, lower interest rates, and reduce the equal monthly amortization of the customer to enable him or her to sustain paying the account and prevent further delinquency,” explained CCAP Executive Director Alex llagan.
Credit Card Association of the Philippines particiants at Inter-Bank Debt Relief Program (IDRP) Press conference
Under this program, the repayment period can extend to as long as ten (10) years for severe cases of indebtedness while interest rates will only be 1.5% per month or even lower depending on the profile of the CUStomer, debt to income ratio and completion of documents required for the program. The participating banks may also have the option to disapprove application for customers who misused and abused the credit facility granted by the banks.
Guidelines of Inter-Bank Debt Relief Program (IDRP) Program
As part of the guidelines of the Program, all existing credit cards of the customer will have to be blocked or canceled upon enrollment of the accounts to the program.
- Accordingly, any rebates or rewards earned will also be forfeited. Additionally, customers cannot apply for new credit facility With the accounts under the IDRP are not yet fully settled, in the program likewise need to show a reasonable amortization prior to being accepted.
- All credit card accounts must be at least months old, With an of at least P 10,000 per card and total card obligations of cards.
- Acceptance into the program will be subject to qualifications, as well as, submission of pertinent documents, compliance with their approved terms, may opt to issue post-date’ interest rate, or pay cash to each bank separately on the for the customer in the future, CCAP now developing payment channel so customers can consolidate all payments location in case of cash payments.
- This facility will be made available before the end of this year.
- Moreover, customers are not allowed to apply on a selective basis only, and are required to disclose and include all credit cards owned with the participating banks.
Once a customer applies for the program, of his or her existing creat card accounts, whether delinquent or not, will be included. This will mean that he or she will no longer be able to use credit cards that are not ye delinquent until after the repayment schedule is completed. The cardholder’s name will also be reported to the Credit Bureau, and this will affect their ability to apply for new credit cards or new loans. This is to prevent customers from making a cash advance in one card to
The cardholder’s name will also be reported to the Credit Bureau, and this will affect their ability to apply for new credit cards or new loans. This is to prevent customers from making a cash advance in one card to pay off obligations in another.
It also eliminate, possible abuse from customers may be looking for a way to pay lower interest on their outstanding balance that are yet past due.
Credit Card Association of the Philippines as Mediator
The aim of the CCAP is to act as a mediator between the credit card industry, merchant establishments, and most importantly, the consumer. Its objective is to promote wider ownership and acceptance of credit cards as a safe, reliable, and beneficial payment instrument. Ultimately, this will enhance purchasing power, thus contributing to the economic development of the country.
To achieve this, CCAP engages itself in cooperative and collaborative efforts with government agencies such as the Bangko Sentral ng Pilipinas (BSP), the Department of Trade and Industry (DTI), and the Bureau of Internal Revenue (BIR); as well as law enforcement agencies and private organizations like the Bankers Association of the Philippines (BAP).
The Inter-Bank Debt Relief Program (IDRP) will be officially launched this June and will initially cover credit card debts. It will eventually include unsecured personal loans within its scope.